SOFT DRINK INDUSTRY ANALYSIS

Soft Drink Industry Analysis

Executive Summary

The comprehensive Soft Drink Manufacturing Industry report provides the most updated data and analysis on the industry's key financial data, cost and pricing, competitive landscape, industry structure, and trends and opportunities. This latest December update provides the data necessary to make informed forecasts and planning for 2010.

Over the past 3 years, the industry has shown a strong growth in exports, at approximately 19% constant annual growth. This growth in international trade is further analysed in the report's export section covering major trade partners. The downstream analysis section of this industry reveals a large dependency on personal consumption. Understanding the recessionary effects on consumer consumption for products within this industry is essential.

Soft Drink Industry Analysis

Introduction

Industry analysts are projecting that the soft drink industry will grow by almost 4% over the next 5 years. The significant growth is estimated to occur within the realms of the bottled water sector and new developments for both snacks and sodas in the U.K., as well as, the rest of the world. Although there are numerous substitutes and alternatives, the savory snack and soft drink industry is going to be a large part of our economy for many more decades (www.bukisa.com). Foreseeable trends are obviously toward the healthier version of this industry. Bottled water sales and revenues have been continually rising since 2003. By 2012 they are projected to increase another 34% in the U.K. alone. Also, with this healthier Britain outlook many snacks and drinks are changing their ingredients leaning towards diet, zero carbohydrates, caffeine free and other healthier variations of currently popular soft drinks. However, on the opposite end of the spectrum are energy drinks, which are unhealthier than normal sodas, are representing an ever growing percentage of the soft drink industry (ivythesis.typepad.com).

Companies need to know these factors if they intend to operate with a competitive advantage in this industry, especially at a time when the economy is slumping. Major forces affecting the industry are economies of scale and barrier to entry. These forces represent the complexity and difficulty of emerging in this market, new entrants are few and far between one another. Additionally, oil prices could vastly affect this industry based on production costs and transportation costs, both are major fixed costs. Furthermore, as mentioned before, growing health concerns are going to somewhat force companies in this industry to start offering healthier and smarter choices for their everyday snacking needs (www.reportbuyer.com).

Accordingly the soft drink industry is projected to show an average growth rate of around .7% for the next 5 years, culminating in a total marketplace increase of 3.6% for 2008-2013. Production and transportation are two of the largest costs in this industry; therefore the price of oil is going to affect the industry in numerous ways. Another significant expense is the cost of labor, as a direct result of Pepsi currently employing about 185,000 employees nationwide. Some of the existing markets in this industry have been around for many decades and are common household names, these include; Coke, ...